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Debt Collection

Can a foreign creditor hire an Israeli lawyer on a no win, no fee basis to collect a debt in Israel?

Yes. Contingency fees are lawful in Israeli civil practice, and debt recovery is one of the areas where they are most commonly used. The arrangement is a private contract between client and lawyer, governed by the Bar Association Law 5721-1961 and the professional ethics rules, and there is no statutory cap on the percentage in a commercial claim. Contingency is not permitted in criminal defense work and is restricted in some family matters, but a commercial debt claim falls outside those limits. Court fees, translation, service abroad, and Execution Office charges are normally excluded from the percentage and remain the creditor’s cost.

Two different fee figures appear in an Israeli collection file and they are easily confused. The first is what the creditor agrees to pay its own lawyer, which may be a percentage of sums actually recovered. The second is the statutory attorney fee that the Execution Office adds to the debt and collects from the debtor, calculated on a tariff scale in the Execution Regulations and paid over when money comes in. A well-drafted contingency agreement gives credit for the tariff fee so the client is not charged twice for the same recovery. The agreement should also state which stages it covers, because an Execution Office file can stay open for years after judgment and the work at each stage is very different.

A foreign creditor should settle several points in writing before instructing anyone. Fix the percentage separately for pre-litigation recovery, for judgment, and for enforcement, since the effort involved is not the same. Agree who funds disbursements, because Israeli courts charge a filing fee calculated on the value of the claim and a foreign claimant with no local assets can be ordered to post security for costs. Israeli VAT is added to legal fees, and a non-resident client may qualify for a zero rate on the service, which the lawyer should confirm before invoicing. Ask for a written power of attorney and a fee agreement you can read, and check the lawyer’s licence on the Bar Association register. See our guide to the costs of debt collection in Israel for the fee scales.

⚖ In Practice
  • Governing law: Bar Association Law 5721-1961 and the Bar Association Rules (Professional Ethics) 5746-1986; the attorney fee tariff under the Execution Law 5727-1967 regulations
  • Competent authority: Israel Bar Association (Lishkat Orchei HaDin) regulates fee conduct; the Execution Office (Hotza’ah LaPo’al) applies the statutory tariff
  • Typical range: 10 to 25 percent of amounts actually recovered in a commercial debt file, higher where enforcement abroad is involved (2026)
  • Excluded costs: court filing fee of roughly 2.5 percent of the claim in the civil courts, Execution Office opening fee, translation, service abroad, expert reports
  • Security for costs: a foreign claimant with no Israeli assets can be ordered to deposit security before the claim proceeds
  • Where contingency is barred: criminal defense work, and restricted in certain family law matters

From the full guide: Debt Collection Costs in Israel

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Get a Free Consultation with Adv. Eli ShimonyPrepared under the direction of Adv. Eli Shimony, Eli Shimony Law Office · Editorial policy

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